British diplomats in Jakarta and the Foreign Office lied about their knowledge of Indonesia's 1975 invasion of East Timor and worked with the US and Australia to cover up details of atrocities committed by Jakarta's troops during the attack, declassified documents have revealed.

The duplicity led relatives of two British journalists killed by Indonesian troops in East Timor in the run-up to the invasion yesterday to intensify their demands for a judicial inquiry into their deaths. British officials knew well in advance that Jakarta was almost certain to attack the former Portuguese colony, and determined that it would be in London's best interests to let it proceed, the documents indicate. They also detail how the British embassy in Jakarta and the Foreign Office lied about their knowledge of atrocities, particularly the killing of three Australian and two British newsmen in a house in the town of Balibo shortly before the main invasion.

The documents include a top secret telegram from the embassy in October 1975, two months before the attack, assessing that an invasion was inevitable. It continues by saying: "The American ambassador said ... Timor was high on [secretary of state Henry] Kissinger's list of places where the US do not want to comment or get involved. I am sure we should continue to follow the American model."

On December 24 1975, the ambassador in Jakarta, John Ford, said in a secret telegram that invading forces had gone "on a rampage of looting and killing". He added: "If asked to comment on any stories of atrocities, I suggest we say that we have no information."

Relatives of the British journalists, Malcolm Rennie and Brian Peters, were told they were killed in crossfire.

In a telegram to London, Mr Ford said: "We have suggested to the Australians that, since we, in fact, know what happened to the newsmen it is pointless to go on demanding information from the Indonesians which they cannot, or are unwilling to provide.

"Their embassy are inclined to agree but are apparently under pressure from Canberra not to let the Indonesians get away with their bland denials."

Maureen Tolfree, Mr Peters's sister, told the Guardian there is now "no reason not to have a judicial inquiry". "The Australians and British should apologise for the stress they've caused and the lies they've told," she said. "But they still won't have a full judicial inquiry, because too many people would be embarrassed."

Margaret Wilson, Mr Rennie's cousin, said that establishing who actually killed the journalists was only half the battle. "It's also the way it was subsequently handled by the British government," she told the Guardian. "We've been told that things won't be handled nowadays in the way they were then; if that's an apology, then I guess we've got one."

A Foreign Office spokesman refused to discuss an apology or an inquiry: "The information is out in the public domain, and we don't have anything to add to those historical documents."

East Timor's annexation by Jakarta was never recognised by the UN, and it won its won its independence in 1999.